More Americans are losing their homes

Also, we are doing away with the Option Arms. In addition to that the new credit scoring model will be out soon and that will change the way people qualify for a home loan.

The time to refi is NOW!

within the next 90 days most people will not be able to regardless of how much equity they have or don't have.
 
Wouldn't that be according to what the borrower does with the money that he is getting every month, with the lower payment compared to a 30Y fixed?

Money is a product...if the borrower is sophisticated enough to understand this...then he should buy money at the cheapest rate, rather than use high cost credit cards and let the balance revolve...

The trouble here is that Joe Consumer, does not understand money and how to use it. If he makes more money with it compared to the cost, then this should be considered.

Michael B.

P.S. I am not advocating using your home as security for frivolous spending...Just understand the product...keep your costs down when borrowing money.


Quote from Aapex:

Your only assuming that the house will continue to appreciate at the national average of 3-6% per year. That might not be the case especially in a cooling market where there are not that many available comps?

Also, the appreciation has to make up for the lack of equity in the house. If the Negam is exceeding the capital appreciation then the borrower will only end up driving themselves deeper into debt.

the cost of a 100% LTV refi is much more expensive.
even FNMA with its 97% LTV is going to cost more then the Option ARM rate even after an initial adjustment.

That is the pickle. Not enough equity. Too much debt. Over spent.
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Could you illustrate how conforming the scoring model will achieve this quote below... good or bad?

My Equifax (now named CSI) model will now improve for the east coast side of my credit profile....Trans union (Central) and Experian (west coast) will now have the same score...beautiful!

I am in the top tier...and my status will not change when it comes to my profile...but I drive a 1990 Plymouth Voyager with simulated wood grain siding...that is another story..


In addition to that the new credit scoring model will be out soon and that will change the way people qualify for a home loan.
 
Your correct!

The only problem is that most people ARE overspent and can't catch up and they can't refi because they don't have enough equity to borrower against to pay off high interest credit debt??

That's the rubbbbbbbbb.
 
Guess where the 200 a month that I save, goes from my option arm folks....? (I have not missed a month as I have a full time job, together with my trading, but I will retire soon and resume with full time trading)

Thats right...in my Retail Spot Forex Fund and Wifey's IRA...My fund makes 40% per year and Wifey's IRA makes similar returns with her QQQQ option spreads...

Michael B.
 
Interesting perspective, Thanks.
Quote from Aapex:

I would have to disagree.

As a Mortgage Professional who specializes in "90% LTV Foreclosure Bailouts" I can tell you 1st hand that the people I'm bailing out are hard working people. Most of whom where once A+ credit borrowers who lost a job, spouse, child or became terminally ill. It is those that are facing tremendous challenges in their life.

The media is lying to the people about the subprime market.
The loans are not the problem. Those will low FICO scores and those that don't make a whole lot of money are the ones that pay their mortgage on time. It's the six figure income guy that needs to be bailed out and not the guy working at the local grocery store.

Not my opinion.
Just the facts!
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Quote from andrasnm:

We have "friends" who bought/refi'ed with these wonderful new 1-percenter loans that are designed for you to make payments for awhile and then hand over your house to the creditor and scoot out of the house like some deadbeat.
The rest of the payments goes arrears and either go into a separate phantom account or just added into the existing loan. Each and every quarter point increase will increase your indebtedness and total liability. Some say it is a FICO score buster 'cause you can start out with a perfect credit, make payments on "your house" for years and see your FICO score destroyed.
THe problem is that people are wither too optimistic about the future, too trusting or just plain stupid about home econ and elementary finance.
Of course media and scummy loan guys are also to blame but ultimately the onus is with the "joe" who gets something that is 'too good to be true' and laps it up!
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Is average US FICO available on a monthly basis?
 
Quote from Aapex:

I would have to disagree.

As a Mortgage Professional who specializes in "90% LTV Foreclosure Bailouts" I can tell you 1st hand that the people I'm bailing out are hard working people. Most of whom where once A+ credit borrowers who lost a job, spouse, child or became terminally ill. It is those that are facing tremendous challenges in their life.

The media is lying to the people about the subprime market.
The loans are not the problem. Those will low FICO scores and those that don't make a whole lot of money are the ones that pay their mortgage on time. It's the six figure income guy that needs to be bailed out and not the guy working at the local grocery store.

Not my opinion.
Just the facts!
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I can confirm your statement: One of my ventures deals with this data. The situation has changed in magnitude over the years but basically the largest dollar value of defaults is largest amongst the overleveraged higher income borrowers. Modest wage earners are the group with the lowest defaults.

There are many people in the areas where I live that are extremely leveraged: All is well until one of the situations you mention occurs and then they face big problems and need someone like you to help them avoid ruin. In my area of the country your services will be in high demand over the next few years......
 
Home construction and home equity saved this economy after 9/11. Yes Greenspan, you did a great job.

Quote from dandxg:

Sad, really, but you could see it coming. When I heard compaines were offering 30 year interest only loans, goodnight! Thanks Greenspan, you did a great job, not!
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